Contingent Payment Mechanisms to Maximize Resource Utilization

We study the problem of assigning resources in order to maximize the probability of resource utilization. This is a sensible design goal in many settings with shared resources. Each agent has private information about its value distribution for different assignments. A mechanism elicits information about value distributions, using this information to determine an assignment along with payments, including payments that are contingent on utilization. Once assigned, each agent later realizes its value and decides how to act. We seek dominant strategy, no-deficit mechanisms with voluntary participation, that maximize the expected utilization. We adopt two natural design constraints: no-charge to an agent if an assigned resource is utilized, and items should always be assigned. For allocating a single resource, we prove that a contingent second-price (CSP) mechanism is unique under these criteria and optimal across a larger class of mechanisms. We extend the mechanism to assign multiple resources, providing theoretical and experimental justification for the performance of the generalized mechanism.